Palms Sports “Alone” in Abu Dhabi Financial Market

The Emirates Stock Market has been emptied of the shares of specialized sports companies or institutions investing in the sports sector, except for one company listed on the Abu Dhabi Financial Market (the second market platform), which is Palms Sports Company, which specializes in jiu . -jitsu, which was officially listed on the Abu Dhabi Financial Market on December 21, 2020, under the symbol “PALMS”, according to a tour of “Vision”.

Palms Sports was established in 2010 to implement a comprehensive jiu-jitsu program in public schools and state institutions across the country with the aim of promoting sports activities for citizens and residents, knowing that it is the leading provider of sports training programs in the country, with a special focus on jiu-jitsu, mixed martial arts and martial arts.

According to the data listed on the official website of the Abu Dhabi Financial Market, Palms’ capital value is 150 million dirhams, knowing that its market value is 779 billion dirhams, and its share price on Wednesday, November 17, is 11,860 dirhams.

Palms Sports Company is a subsidiary of the International Holding Company, headquartered in the United Arab Emirates. And European, as sports institutions and clubs reap huge financing returns by listing their shares in the financial markets, which holds huge financial benefits for them.

“Lejam” in Saudi stock exchange

At the level of the financial markets in the Arab Gulf region, the situation was not better than it is in the UAE, as sports institutions and clubs are reluctant to enter the money exchanges, except for a shameful presence in the Saudi stock market (Tadawul )) by the Gym Sports Company, which specializes in fitness (C), as one of the mathematically leading companies in the field of offering shares in the stock market.

Soccer Association Initiatives

In July 2017, the Emirates Football Association A Memorandum of Understanding with the Securities and Commodities Authority as an exceptional initiative, which lays the foundations and criteria for building a strategic partnership, with the Financial Markets Sector Regulator, represented by the Securities and Commodities Authority, with the aim of improving the competitiveness of sports clubs in the UAE, despite the lapse of 4 years since the signing of that memorandum We have not seen any practical progress in this regard, and no sports company affiliated with sports clubs or federations is in the stock market not listed.

The memorandum of understanding signed at the time included a clause on the formation of a working group between the two institutions, to establish the general framework for the conversion of football clubs into public joint stock companies, in preparation for their inclusion in the country’s capital markets. , which has so far not happened on the ground.

Reasons for absence of stock exchanges

The financial expert specializing in stock markets, Waddah Al-Taha, attributed the reluctance of sports companies and clubs in the country to be present in the financial markets to two main reasons. .

The conditions for listing on the stock exchanges require that the club have a profit return of not less than 10% of the budget of the club or sports organization during the past two years preceding the listing application.

He explained: “Federations and clubs that are fully funded by the government are not currently eligible for listing on stock exchanges unless they diversify their income sources with other investments, especially real estate.”

Al-Taha told Al-Ru’ya that the candidate clubs, which are likely to join the financial markets, are those that own real estate companies affiliated to the clubs’ investment companies, especially since all professional clubs in the Emirates have investment companies at they affiliated, but the important question remains, what are the economic activities? What are these companies doing and their role in supporting club budgets and the impact of that support?

Solution

The expert and financial analyst has seen that the most prominent solutions that the UAE clubs and sports federations can follow to be present in the money exchange is to improve their investments in other commercial activities, specifically real estate, as many real estate clubs possess. in characteristic and vital places in all regions of the country, and they must be managed in a way It earns financial returns that contribute to the financing of its activities, and achieves reasonable profits to meet the criteria and conditions for entry into the stock market.

He added: “The clubs with the large masses can offer a number of shares to the club’s supporters for entry into the capital markets, after the club has been transformed into a private joint-stock company, and an evaluation process is being carried out for it, and to ensure profitability and positive cash flow, the shares are allocated in the first stage.For the club’s supporters, or through the public offering of shares, provided a segment of it is allocated to the club’s fans, a others to companies and a third to individuals, this situation guarantees the club to achieve great financial returns.

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